Costco to Open $440 Million Chicken Farm to Avoid Chicken Monopoly

Costco plans to open a chicken farming operation in eastern Nebraska, coming fall of 2019. Operating under the name Lincoln Premium Poultry, the project will include a hatchery and feed mill on the 414-acre site.Costco will receive 100 million chickens, or 40 percent of its yearly chicken needs. The company hopes to escape the American chicken monopoly run by the likes of Tyson, Pilgrim’s Pride and Perdue with its plan, which would already allow for partial escape.

The wholesale giant, which sells nearly 80 million of its famous $4.99 rotisserie chickens per year, will create roughly 1,100 new jobs and invest $180 million in the region, according to a press release from the Greater Fremont Development Council. Bill Crider, an executive of Lincoln Premium Poultry, stated in an interview with KTIC Radio that Costco will slaughter nearly 1.7 million chickens a week, or 85 million chickens a year.

Costco’s move is part of another reason as well – to gain more control over its own supply chain. The company will be able to determine the size and cut of the meat, in addition to moving towards antibiotic-free and cage-free chickens.

The facility is expected to supply one third of rotisserie and raw chicken sold at Costco’s U.S. stores. Costco began assisting farmers within a 100 miles radius to invest in and build chicken houses, in which it provided up front capital of $120,000-$240,000 to new growers and extending 15-year purchase contracts. Majority of those 125 growers being sought out will be new to poultry growing.

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